Business & Tech

Groupon Experience Leaves Sour Aftertaste at Restaurant

Sewickley Cafe owner says he lost thousands of dollars and customer goodwill from dining promotion.

When he signed on for a Groupon promotion, Don Reinhardt thought the popular online vendor would attract new customers to enjoy the tasty food and expansive menu at his casual Sewickley restaurant.

Instead, Reinhardt was left handling a business owner’s nightmare: the wrath of hundreds of angry diners who couldn’t be accommodated with dinner reservations.

“To say it was a disaster is an understatement,” said Reinhardt, who opened the in a former soccer sporting goods store in 1998.

Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.

Groupon, founded in 2008 by Mt. Lebanon native Andrew Mason, features a daily deal offering discounted rates on goods, services, tickets, dining and other amusements to a group of buyers within a set period of time.

When a sales representative from the company contacted Reinhardt last year about participating in a dining-discount promotion, the restaurateur said he was hesitant at first. But after he listened to the sales representative, Reinhardt said he felt better about the deal and agreed to offer a Groupon for a discounted meal at his cafe.

Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.

“They really sold me on it,” he said.

The Agreement

Reinhardt said his agreement called for Groupon to sell 450 of its coupon deals. Instead, by Groupon's own admission, it sold 1,340. The Sewickley Cafe has 16 indoor tables, and with its additional outdoor patio seating unavailable in February and early March, the restaurant could handle only a limited number of dinner reservations each night.

Reinhardt said the Groupon restrictions stated that users could redeem the coupons for dinner only and had to make a reservation for a Friday or Saturday night. In some cases, he said, Groupon holders showed up with large parties and without reservations, and the restaurant couldn't accommodate them. Smaller parties without reservations were not always forthcoming at first that they intended to present and use a Groupon, he added.

The biggest problem, he said, was that 60 percent to 70 percent of the Groupon holders for Reinhardt’s restaurant didn’t try to use their certificates until the last minute. The tidal wave started about Feb. 14 and continued through March 6, when the Groupons expired, he said.

During that time, he said, restaurant employees were handling about 200 calls a day. Reinhardt said he tried to accommodate everyone by fitting in 25 to 30 Groupon holders a night in addition to regular customers, but even then it was impossible to accommodate the crowds.

“It was just beyond a disaster,” said Reinhardt, referring to the throng of Groupon holders.

Reinhardt called Groupon to inform the company that it had sold nearly 900 Groupons more than it originally agreed to sell. He said he didn't get relief until he spoke to Rob Solomon, president of Groupon.

The company this week issued an apology, through an e-mail,  to the Sewickley Cafe and to the customers who had purchased the restaurant's Groupons, for the problems experienced during the promotion.

“The issues that occurred during the redemption process can be attributed directly to us at Groupon,” the company said in the e-mail sent to customers with unredeemed coupons.

“When we work with a business to structure a deal we take many factors into consideration: desired purchase, availability of tables, seating, product, potential savings for customers, value to the business and more.”

“Unfortunately, in this instance, we did not meet our typically high standard for organizing this deal for our customers and the business involved. Specifically, the maximum number of purchases should have been 450, not the 1,340 that were sold,” the company said.

'No Way' to Accommodate

The company also acknowledged the issues that resulted after customers attempted to redeem the coupons.

“With 800 Groupons still unredeemed as of February 1, 2011, there was no way the cafe could begin to accommodate this number having only 16 tables in the entire restaurant," the company said.

“Had we sold the correct number of Groupons, any availability issues would have been extremely unlikely.”

For those who weren’t able to use their Groupon, the company has offered a refund at support@groupon.com.

Meanwhile, Reinhardt has hired an attorney to help deal with the fallout and to help his businesss repair its image.

In some cases, he said, angry customers yelled and screamed at him. One man who came in alone to redeem his Groupon became upset when he learned he wouldn’t be seated, even though the coupon required two or more diners, Reinhardt said.

“He made a huge scene and accused me of stealing his money,”  Reinhardt said.

were called shortly before 5:30 p.m. on March 6 to help settle the customer's dispute, according to a police report.

Police said Keith Scharding of Pittsburgh complained to officers that he had a Groupon certificate he wanted to use but was denied service at the cafe. Police said Scharding was upset because Reinhardt told him he needed reservations, although Scharding saw few customers when he went into the restaurant.

Police said Scharding wanted to be served because his certificate expired that day. The cafe was booked with reservations, police said.

In an interview, Scharding said he had used Groupon before and had purchased the Sewickley Cafe offer for his brother. They tried to use it on New Year’s Eve, but Scharding said the restaurant wouldn’t honor it because of the holiday. He returned on March 6, but  said the owner wouldn’t seat him, saying the restaurant would be filled within a half-hour.

Scharding said he waited for 30 minutes but saw onlythree people come in. Upset, Scharding said he called the police.

“I said, forget it,” Scharding said.

He said he fulfilled all Groupon stipulations for using his certificate.

“Groupon refunded my money from that, without question. That’s a reputable group,” he said.

A Rare Incident

Groupon spokeswoman Julie Mossler said in a statement that incidents such as the Sewickley Cafe's experience are rare.

"But when they happen, we do everything we can to work with the merchant and find a solution that makes the situation manageable for the business owner and enables our customers to redeem their Groupons," she said.

"Our merchant services team has been working closely with Sewickley Cafe to achieve both. We're disappointed that some customers haven't been able to enjoy the Groupons they bought for this deal. If that ever happens, customers can be confident that Groupon will return their purchase, no questions asked," Mossler said.

Scharding asked to file a police report about his situation. Reinhardt said he explained the overbooking situation to police and told Scharding to get a refund from the Groupon company.

In another incident, Reinhardt said two people came into the restaurant and denied having a Groupon. After seating the couple, employees watched one of them pull the certificate out of her purse and grin.

When the waiter confronted her about the Groupon, Reinhardt said the woman replied, “I thought he said, ‘Are we with a group?' ”

After studying his business accounts this week, Reinhardt said he calculates he lost at least $12,000 from accommodating more discount customers than he originally agreed to do. 

“The amount of money I lost in February and the first week of March -- we’re trying to account for what I lost,” he said.

As a business owner in the village for 15 years, Reinhardt said he blames himself for not trusting his instincts about declining to get involved in the promotion.

He said the Groupon is good for some business owners, such as those who offer limited access to products or events. He cited the example of a friend who promoted a whiskey and wine festival and used Groupon to boost sales.

For Reinhardt, though, this first Groupon promotion was his last.

"It just doesn’t work" in his experience, he said. "It’s just not one of those things that works well.”


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here

More from Sewickley